FarmPolicy

September 24, 2018

Farm Bill; Regulations; Ag Economy; and, Biotech

Farm Bill

DTN Ag Policy Editor Chris Clayton reported yesterday that, “USDA is faced with trying to sort out some complicated changes to commodity programs quickly with fewer staff to help walk farmers through all the various decisions, Deputy Agriculture Secretary Krysta Harden said Thursday.

“Harden got a chance at Commodity Classic to address her old employers as she talked about implementing the farm bill with members of the American Soybean Association. She also talked to members of the National Corn Growers Association about the farm bill.”

Mr. Clayton noted that, “Farmers for both NCGA and ASA asked Harden whether local Farm Service Agency offices would see a boost in staff. She noted USDA is a smaller place than in the past and that will create some challenges. There is some one-time funding in the farm bill for technology assistance to help get the farm bill up and running, but Harden added, ‘Long-term, I would be dishonest, frankly, if I promised additional staff,’ she said. ‘I just don’t see it probably in my tenure, frankly, at USDA, I don’t see us staffing back up.’

“USDA will have its first public meeting on implementing the farm bill early next week in Washington, D.C. At least 200 people have signed up to attend for a chance to weigh in. USDA has already announced that sign-up for livestock disaster programs will begin in April.”

Harden added later that the complete change of commodity programs in Title I will be difficult to implement. Farmers will not only get the chance to update base acres, but also yields. Farmers will enroll each commodity in ARC [Agriculture Risk Coverage] or PLC [Price Loss Coverage] individually. Harden said information to update yields likely will be cross-referenced between FSA and the Risk Management Agency,” the DTN article said.

Daniel Looker reported yesterday at Agriculture.com that, “Harden, who also met with the National Corn Growers Association and the National Association of Wheat Growers Thursday, reminded listeners that many Americans want smaller federal government. And they’ve gotten that at USDA. The agency has a budget that’s about $1 billion smaller than it was in 2009 and its staff is already lean.

“‘I just want to remind you that we’re a smaller place than we used to be, by design,’ she said.”

Nick Paulson and Jonathan Coppess of the University of Illinois indicated an in update yesterday at the farmdoc daily blog (“2014 Farm Bill: The Supplemental Coverage Option”) that, “The Crop Insurance Title of the 2014 Farm Bill includes provisions for the creation of a new crop insurance program referred to as the Supplemental Coverage Option (SCO).  SCO is an optional program which will be available starting in the 2015 crop year. SCO provides supplemental coverage which mimics the producer’s individual insurance program choice, covering a portion of the deductible using a county-level measure of yield or revenue. Today’s post outlines the details of the SCO program, its eligibility rules and linkages with the new PLC and ARC commodity program options, and offers some considerations for producers in making commodity and crop insurance decisions.”

Meanwhile, the Government Accountability Office released an update yesterday (“Implementing Nutrition Changes Was Challenging and Clarification of Oversight Requirements Is Needed”) which noted that, “Nationwide, student participation in the National School Lunch Program declined by 1.2 million students (or 3.7 percent) from school year 2010-2011 through school year 2012-2013, after having increased steadily for many years. This decrease was driven primarily by a decline of 1.6 million students eating school lunch who pay full price for meals, despite increases in students eating school lunch who receive free meals. State and local officials reported that the changes to lunch content and nutrition requirements, as well as other factors, influenced student participation. For example, almost all states reported through GAO’s national survey that obtaining student acceptance of lunches that complied with the new requirements was challenging during school year 2012-2013, which likely affected participation in the program. Federal, state, and local officials reported that federally-required increases to lunch prices, which affected many districts, also likely influenced participation.

“School food authorities (SFA) faced several challenges implementing the new lunch content and nutrition requirements in school year 2012-2013.”

In other news, an update yesterday from Sen. Kirsten Gillibrand (D., N.Y.) stated that, “[Sen. Gillibrand] today called on the U.S. Department of Agriculture (USDA) to bolster its efforts to revive New York’s bee population after a year when beekeepers lost on average 30 percent of their hives to Colony Collapse Disorder (CCD) — hurting New York farms’ ability to pollinate crops. Earlier this month, USDA Secretary Tom Vilsack directed $3 million to study bee losses in the Midwest. Senator Gillibrand is urging the USDA to expand their investigation to New York and the Northeast.”

 

Regulations

Michael Wines reported in yesterday’s New York Times that, “A United States-Canadian agency called on Wednesday for swift and sweeping limits on the use of fertilizer around Lake Erie to reduce the amount of phosphorus entering the water and creating a vast blanket of algae each summer, threatening fisheries, tourism and even drinking water.

“In a report on the algae problem, the agency, the International Joint Commission, said that fertilizer swept by rains from farms and lawns was a major source of phosphorus in the lake. It recommended that crop insurance be tied to farmers’ adoption of practices that limit fertilizer runoff, and that Ontario, Ohio and Pennsylvania ban most sales of phosphorus-based lawn fertilizers.”

The Times article noted that, “The commission, which studies and regulates water uses in streams and lakes along the border of the United States and Canada, urged Michigan and Ohio to invoke the Clean Water Act to limit phosphorus pollution from farmland as opposed to from factories and other places where pollution can be pinpointed and measured.

“The proposals are likely to encounter strong opposition from the agricultural industry and fertilizer manufacturers. Both groups have already asked a federal appeals court to prohibit the Environmental Protection Agency from regulating farm-related pollution from phosphorus and other chemicals along the Chesapeake Bay.”

DTN Ag Policy Editor Chris Clayton reported earlier this week (link requires subscription) that, “The Occupational Safety and Health Administration has dropped its case against a Nebraska farm that potentially faced $132,000 in fines from the agency over grain-bin inspection issues going back to 2011.

“James Luers, an attorney from Lincoln, Neb., told DTN that OSHA had failed to respond to a motion for summary judgment that Luers had filed with the administrative-law judge. On Monday, Luers said he got a call from OSHA officials who told him they were dropping the case.

“The fact OSHA had cited a farm with fewer than 10 employees with regulatory violations over grain handling sparked enough political furor that OSHA reversed a 2011 memo that had opened the door to such inspections.”

In a news release this week regarding this development, Sen. Mike Johanns (R., Neb.) noted that, “OSHA had no business regulating this family farm to begin with.  I’m pleased they are doing the right thing by correctly dropping the case. Producers shouldn’t have to worry about the government placing undue and illegal burdens on their operations. The law clearly exempts small farms from OSHA regulations, and I’m glad the agency took this step to get back in line with the law.”

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House on Thursday approved legislation that would force federal agencies to be more transparent about pending regulations, and make them choose regulatory alternatives that impose the smallest cost possible on companies.

“The Achieving Less Excess in Regulation and Requiring Transparency Act, or the ALERRT Act, is the GOP’s latest attempt to limit the impact of federal rules on the private sector. Republicans say the explosion of regulations is the chief culprit behind the lackluster job growth around the country, a message the GOP appears likely to repeat up until the November midterm elections.”

A recent statement indicating that the President would veto the measure noted that, “The ALERRT Act would impose unnecessary new procedures on agencies and invite frivolous litigation.”

Elizabeth Williamson reported yesterday at The Wall Street Journal Online that, “Rep. James Lankford, a conservative Republican from Oklahoma, has national political ambitions. But, for all politicians, there is the eternal Washington truth that all politics is local—and so it happens that Mr. Lankford on Thursday turned a House investigative spotlight on Oklahoma’s Lesser Prairie Chickens and American Burying Beetles.

“The bird, the bug and the Endangered Species Act have been a 10-year headache for farmers, builders and drillers in Oklahoma, where Mr. Lankford is seeking the U.S. Senate seat of retiring Sen. Tom Coburn.”

The Journal article stated that, “In an interview before the hearing, he demanded to know how the U.S. Fish and Wildlife Service knows the Lesser Prairie Chicken ‘is scared of things taller than 13 feet?’ as one report implied. ‘They seem to be very in touch with the mind of this bird.’ Furthermore, how does the agency know the American Burying Beetle population is dangerously low, when ‘it’s a beetle that lives underground?’”

 

Agricultural Economy

Kelsey Gee reported yesterday at The Wall Street Journal Online that, “Tight supplies of U.S. livestock sent cattle futures to a record high Thursday, while hog futures surged to the highest level in 2½ years.”

The Journal article explained that, “Cattle prices are underpinned by tight supplies after years of drought in the central U.S., which forced ranchers to cull their herds. The supply squeeze is being exacerbated this year by a sharp drop in the cost of animal feed. The lower costs are prompting ranchers to retain more female cattle to breed animals and rebuild their herds, which in the near term cuts the number headed for slaughter.

Live-cattle futures have jumped 10% so far this year, a gain that is leading to higher wholesale beef prices and is widely expected to result in record U.S. consumer prices for steaks, ground beef and other products in coming months.”

Hog farmers are selling fewer hogs because porcine epidemic diarrhea virus, or PEDV, has killed millions of piglets since last spring. The virus, which causes severe diarrhea and vomiting, is fatal only to young pigs and poses no threat to human health or food safety, according to swine veterinarians,” the Journal article said.

Katie Micik reported yesterday at DTN (link requires subscription) that, “Lower feed costs may spark a livestock industry renaissance and return to profitability, a team of Purdue University ag economists said Monday.

“‘It’s not just the start of a good year for the animal industry, but an era,’ ag economist Chris Hurt said during a webinar hosted by Purdue’s Center for Commercial Agriculture.

“Feed costs are likely to remain at or below the 2007-13 average, providing hog and cattle operations with opportunities to stabilize their finances and expand their herds after several tough years.”

In other news, Jason Samenow reported yesterday at The Washington Post Online that, “Experiencing its driest year on record, large parts of California need well over 15 inches of rain to emerge from severe drought.  A vigorous storm crashing into its central coast Friday will supply some much-needed rain, but perhaps too much at once.  Forecasters warn strong winds, flash flooding, mud and debris flows, and even a few weak tornadoes may accompany the powerhouse weather system.

The incoming storm may be the largest rain event in Southern California since March 2011 says the National Weather Service.”

From an international perspective, Samantha Pearson and Emiko Terazono reported yesterday at The Financial Times Online that, “After a January that ranked as one of the hottest and driest on record, heavy rains expected across the south of the country [Brazil] will be a welcome relief for the region’s farmers.

Panic has spread across global agricultural markets over the past few weeks as Brazil’s January drought ravaged crops in the country that is the world’s top producer of coffee, sugar and orange juice, and a big supplier of grains such as soyabeans and corn.”

The FT article added that, “Concerns about South American supplies and firm demand have pushed up soyabeans to five-month highs above $14 a bushel. However Soren Schroder, chief executive of Bunge, told analysts earlier this month that he was still confident of a record soyabean crop this year. ‘The northwestern part of Brazil is probably better than people expect, and there are some parts of the south that are a little bit worse but on average, the soyabean crop in total looks to be really just an excellent one,’ he said.”

Meanwhile, Kimberly Kindy reported in today’s Washington Post that, “Poultry workers, chicken industry lobbyists and food-safety advocates have been converging on Capitol Hill in recent weeks with dueling efforts to either boost or kill a proposal to overhaul the way the $60 billion-a-year poultry industry operates processing plants.

“The latest push came Thursday when civil rights and worker-safety groups arranged for poultry workers to meet with lawmakers and administration officials to warn against the proposed acceleration of processing-line speeds and to share their accounts of injuries being caused at current speeds.”

The Post article added that, “The USDA was expected to finalize the plan last summer, but some members of Congress, along with worker and food-safety groups, raised concerns over provisions that could increase processing line speeds by 25 percent and reduce the number of government inspectors by 40 percent. In exchange, the poultry industry would be required to take steps to reduce food-borne pathogens, such as salmonella.

“Now, after months of delays, the agency’s proposal has picked up steam again. One sign that the Obama administration is inclined to support the plan is that the president’s budget, due for release next week, is expected to reflect government cost-savings arising from reduced inspections, according to several lobbyists and Hill staffers who have been briefed on the issue.”

Also, Reuters writer Carey Gillam reported yesterday that, “DuPont Pioneer, the agricultural seed unit of DuPont, said on Thursday it was launching a suite of ‘whole-farm decision’ services aimed at boosting crop productivity, a line of business many in the agricultural sector are racing to offer.

“The platform of data and technology services, to be called ‘Encirca,’ will have a dedicated website and a team of about 50 Encirca sales and service agents through key corn- and soybean-growing areas of the U.S. Midwest, DuPont said.

“The move, which comes just ahead of the key U.S. spring planting season for corn, soybeans and other crops, follows several deals the company has signed with various information and technology partners.”

In trade related developments, Vice President Joe Biden penned a column yesterday in The Financial Times which noted in part that, “The US is currently negotiating major trade agreements across the Atlantic and Pacific. Both deals are historic in scope, offering us a chance to shape the global economy in ways that strengthen US leadership in the world and the American middle class at home.

“Many in Congress and in my own party view new trade agreements sceptically and are reluctant to offer their support. I understand the pressures these lawmakers face.

“But I am convinced that the two deals we are negotiating are in America’s best interest, and that politicians will ultimately be rewarded for making them happen. That is why President Barack Obama and I are committed to seeing them through.”

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Japanese Prime Minister Shinzo Abe said Thursday that no timetable should be attached to completion of a far-reaching Asia-Pacific trade agreement.

“Abe argued that the negotiators should take their time even with President Obama scheduled to make a four-country trip through the Pacific Rim, including a stop in Tokyo, in April.”

And Julian Hattem reported yesterday at The Hill’s Hillicon Valley Blog that, “President Obama has nominated a former software trade group lobbyist for a top trade office.

Robert Holleyman spent more than two decades as the chief executive of BSA/the Software Alliance, a trade organization for software companies that counts Apple, IBM, Microsoft and other top computer firms among its members.

“On Wednesday evening, the president tapped him to be a deputy U.S. trade representative.”

Also yesterday, the National Farmers Union issued a news release regarding trade issues (“Trade Agreements Must Address Currency Manipulation”) and the National Milk Producers Federation and U.S. Dairy Export Council issued a joint release yesterday titled, “U.S. Dairy Organizations Say Trans-Pacific Trade Deal Must Further Open Japan, Canada to Exports.”

 

Biotech

Reuters writer Karl Plume reported yesterday that, “U.S. farmers should closely consider the markets they serve when choosing to plant a new genetically modified Syngenta AG corn variety as it is not approved by all major importers, including China, the U.S. Grains Council said on Thursday.

“Grain exporters also need to be keenly aware of the varieties they handle to prevent further disruptions to international trade, said USGC, which helps develop foreign markets for grain.

“Syngenta’s Agrisure Duracade corn is available for planting in the United States for the first time this year but China and the European Union have not yet approved it for import, raising concerns about potential trade disruptions.”

Keith Good

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